How Do You Stay Entertained In A Recession? Used Video Games.

Video games are up, and books are down. GameStop says sales of used games jumped 32%, as the retailer posted a 13% rise in fiscal first-quarter earnings. Why is GameStop doing so well while other retailers suffer? Its used video game program has excellent profit margins.

From the WSJ:

New-game software sales slid 2.8% while new hardware sales rose 17%. Sales of used games jumped 32%.

The company has benefited from a virtual monopoly in the used-games market. But it is now facing competition from Inc., which launched a service allowing customers to trade in games for store credit.

GameStop, which is based in Grapevine, Texas, opened 114 new stores during the quarter. In February, it said it planned to open more than 400 stores this year

Meanwhile, investors are actually happy that Barnes & Noble didn’t lose as much money as they thought they might. Guess they should start selling used books, huh?

Barnes & Noble Exceeds Estimates, Boosts Forecast (Update2) [Bloomberg]
GameStop Posts Higher Net, but Warns of Slowdown [WSJ]